Growing Pains or Insurmountable Odds?

South Sudan just successfully hosted one of the largest events in the country’s short two-year history. On December 4 and 5 an impressively diverse crowd of potential investors and business owners from more than 60 countries came together in the capital Juba for the South Sudan Investment Conference, titled “Investment for Economic Diversification and Prosperity.” With more than 800 people registered to attend the two-day event, and at least 500 actually in attendance, observers and participants alike were relatively pleased that the event was carried out with only a few hiccups.

Logistically, it was just shy of a miracle. With only one major paved road in the entire country, a nascent hospitality and service industry, and a lack of local transportation options, it is noteworthy that an event of this magnitude even took place.

During the program, government officials from the ministries of Finance, Foreign Affairs, Justice, Agriculture and others shared their strategies and priorities for growth and development. International donors and development partners helped shed light on opportunities and realities for investment in the country, which is compromised of ten states and more than 62 main ethnic groups (or just less than 100 if subgroups are counted). The President himself – Salva Kiir – provided the keynote address, and the Prime Minister of Timor-Leste also addressed the crowd to stress the importance of private sector investment.

While the content of the conference left room for improvement (i.e. there wasn’t much talk of returns on investments, profits, or the elephant in the room – corruption), all was relatively calm and manageable, even with temperatures soaring up to 100 degrees.

The country needs investors. Like a newborn child, in fact, it needs just about everything – roads, power, industries, food, access to markets, money, and probably most importantly, social cohesion. South Sudan was born of turmoil, with a history of conflict stemming from the 1950s. Decades of fighting and negligence, as well as aggression and oppression from Khartoum, did not leave much in the way of a strong governance structure from which South Sudan could be born.

After the civil war, what was left instead was millions of South Sudanese refugees, some displaced internally and some fleeing across borders. In July 2011, after a multi-year Comprehensive Peace Agreement, the country gained its independence, and has faced a myriad of challenges ever since. Chief among them is the unresolved border disputes with Sudan, as well as fighting over oil, which currently constitutes 95-98 percent of South Sudan’s revenues (when it’s not shut off due to disputes with its northern neighbor.) Limited local production leaves South Sudan highly dependent on imports, but agricultural development holds great potential since currently only 4 percent of fertile land is under production. Agriculture is a sector of hope for the country — that is, if the initial investments can be made.

Just ten days after the investment conference wrapped up, instead of hundreds of people coming into the country, hundreds are now fleeing. On Sunday, ethnic violence rocked the country’s capital Juba as well as other regions, leaving as many as 500 people dead. At the time of this writing, word has come from a few contacts that things have calmed in Juba, but the volatile city of Bor in Jonglei state is still being claimed by the rebel factions.

Given South Sudan’s already risky investment environment, the recent outbreak of violence will likely keep any new prospects at bay. Investors need to have confidence, and those willing to consider South Sudan are those with a longer term vision. One can only hope a peaceful diplomatic resolution will come quickly, though building the social cohesion and strong governance structures that create an environment ready to receive investors doesn’t happen overnight.

The South Sudanese are anxious to see the benefits of independence. They are eagerly anticipating change, but so far, little has. In seven months, the country turns three years old, hardly the age when a child is ready to stand on his or her own. But with a dedicated and returning diaspora, a resilient population that has survived violence before, and continued support from the international community, South Sudan will get there… eventually.

The ethnic clashes have very deep and complex roots, but unarguably, much of the the tension is driven by a sense of marginalization. I believe both the Dinka and Nuer, like every other ethnic group, want to participate in their country’s political processes. They want to know they can influence the direction of their country for the better. They want to have a place where their concerns are heard. They want accountable leaders and institutions. I believe they want to trust again. Violence will not help achieve this.

I was supposed to be in Juba right now. After participating in the investment conference, meeting with several local organizations and partners, I cut my trip short as I successfully rounded up meetings earlier than I had planned. So instead of participating in an emergency evacuation right now, I am counting my blessings that I am in the safety and comfort of my home country.

As for those I had just met with, I inquired about their safety and learned of their predicaments. Fortunately, they are safe for now. One has had bullets hit his home. Another witnessed a nearby killing as he sought refuge and was “nearly gunned down.” Yet another awaits word from his mother who was last in her home alone in the town of Bor, which was overtaken by the rebel forces.

South Sudan will move forward from this, but it will take time, as it does for any new nation to build up strong institutions of democracy. In the words of a local friend in Juba who emailed me yesterday, “We pray for the young nation and the people who live in it, to see peace and tranquility again. To enjoy life as it had just started happening.”

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The CIPE Development Blog provides coverage of the Center for International Private Enterprise and its partner network at work -- highlighting successes, drawing out lessons from failure, and exploring the broader issues of political and economic development. For more information visit CIPE.org.